Principles of Macroeconomics
Sixth Canadian Edition
Test Bank
N. Gregory Mankiw • Ronald D. Kneebone • Kenneth J. McKenzie
Academic Year: 2025–2026
Principles of Macroeconomics Sixth Canadian Edition Test Bank N. Gregory Mankiw • Ronald D.
Kneebone • Kenneth J. McKenzie
Chapter 1 — Ten Principles of Economics
Multiple Choice
Foundations of Economics & Scarcity
1. The term “economy” originates from a Greek word meaning:
a. exchange system
b. household production
c. market coordination
d. household management
ANS: D
2. The word economy is derived from Greek words referring to:
a. environmental balance
b. managing a household
c. participation in trade
d. conservation of resources
ANS: B
, 3. What similarity exists between a household and an economy?
a. Both rely on centralized authority
b. Both avoid scarcity
c. Both distribute only what they produce
d. Both must allocate limited resources
ANS: D
4. Economics is primarily concerned with the concept of:
a. inequality
b. scarcity
c. growth
d. authority
ANS: B
5. Which of the following is not one of the fundamental decisions every society must make?
a. What goods and services should be produced
b. Who will produce goods and services
c. What shapes individual preferences
d. Who will consume the output
ANS: C
6. Why must households and societies constantly make choices?
a. Resources are limited
b. Population levels fluctuate
c. Wage levels change over time
d. Individuals often disagree
ANS: A
7. A good is considered scarce when:
a. production capacity is limited
b. not everyone can obtain as much as they want
Sixth Canadian Edition
Test Bank
N. Gregory Mankiw • Ronald D. Kneebone • Kenneth J. McKenzie
Academic Year: 2025–2026
Principles of Macroeconomics Sixth Canadian Edition Test Bank N. Gregory Mankiw • Ronald D.
Kneebone • Kenneth J. McKenzie
Chapter 1 — Ten Principles of Economics
Multiple Choice
Foundations of Economics & Scarcity
1. The term “economy” originates from a Greek word meaning:
a. exchange system
b. household production
c. market coordination
d. household management
ANS: D
2. The word economy is derived from Greek words referring to:
a. environmental balance
b. managing a household
c. participation in trade
d. conservation of resources
ANS: B
, 3. What similarity exists between a household and an economy?
a. Both rely on centralized authority
b. Both avoid scarcity
c. Both distribute only what they produce
d. Both must allocate limited resources
ANS: D
4. Economics is primarily concerned with the concept of:
a. inequality
b. scarcity
c. growth
d. authority
ANS: B
5. Which of the following is not one of the fundamental decisions every society must make?
a. What goods and services should be produced
b. Who will produce goods and services
c. What shapes individual preferences
d. Who will consume the output
ANS: C
6. Why must households and societies constantly make choices?
a. Resources are limited
b. Population levels fluctuate
c. Wage levels change over time
d. Individuals often disagree
ANS: A
7. A good is considered scarce when:
a. production capacity is limited
b. not everyone can obtain as much as they want
